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vi Contents
Auditing PC-Based Accounting Systems 103 CHAPTER 6

PC Systems Risks and Controls 104 Transaction Processing and Financial
Summary 107 Reporting Systems Overview 223
Appendix 108
An Overview of Transaction Processing 224
Transaction Cycles 224
CHAPTER 4 Accounting Records 226
Security Part II: Auditing Manual Systems 226
Database Systems 131 The Audit Trail 231
Computer-Based Systems 234
Data Management Approaches 132 Documentation Techniques 236
The Flat-File Approach 132
Data Flow Diagrams and Entity Relationship
The Database Approach 134
Diagrams 236
Key Elements of the Database Environment 135 System Flowcharts 239
Database Management System 135 Program Flowcharts 249
Users 138 Record Layout Diagrams 250
The Database Administrator 140
Computer-Based Accounting Systems 251
The Physical Database 141
Differences Between Batch and Real-Time Systems 252
DBMS Models 142
Alternative Data Processing Approaches 253
Databases in a Distributed Environment 151 Batch Processing Using Real-Time Data Collection 256
Centralized Databases 152 Real-Time Processing 258
Distributed Databases 153 Controlling the TPS 258
Concurrency Control 156
Data Coding Schemes 258
Controlling and Auditing Data Management A System without Codes 260
Systems 157 A System with Codes 260
Access Controls 157 Numeric and Alphabetic Coding Schemes 261
Backup Controls 161
The General Ledger System 264
Summary 166 The Journal Voucher 264
The GLS Database 266
CHAPTER 5 The Financial Reporting System 266
Systems Development and Program Change Sophisticated Users with Homogeneous Information
Needs 267
Activities 173 Financial Reporting Procedures 267
The Systems Development Process 174 XBRL—Reengineering Financial Reporting 269
Participants in Systems Development 174 XML 270
Information Systems Acquisition 175 XBRL 270
In-House Development 175 The Current State of XBRL Reporting 274
Commercial Systems 175 Controlling the FRS 275
The Systems Development Life Cycle 177 COSO Internal Control Issues 275
Systems Planning—Phase I 178 Internal Control Implications of XBRL 278
Systems Analysis—Phase II 180 Summary 278
Conceptual Systems Design—Phase III 184
System Evaluation and Selection—Phase IV 188 CHAPTER 7
Detailed Design—Phase V 194
Application Programming and Testing—Phase VI 196
Computer-Assisted Audit Tools
System Implementation—Phase VII 199 and Techniques 289
Systems Maintenance—Phase VIII 205 IT Application Controls 290
Controlling and Auditing the SDLC 205 Input Controls 290
Controlling and Auditing New Systems Processing Controls 295
Development 205 Output Controls 302
The Controlling and Auditing Systems Testing Computer Application Controls 306
Maintenance 208 Black-Box Approach 306
Summary 214 White-Box Approach 307
Copyright 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s).
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Contents vii
Computer-Aided Audit Tools and Techniques Batch Processing Cash Receipts System 391
for Testing Controls 310 Integrated Real-Time Sales Order System 393
Test Data Method 310 Integrated Real-Time Cash Receipts System 395
The Integrated Test Facility 314 Point-of-Sale (POS) Systems 395
Parallel Simulation 315 Revenue Cycle Audit Objectives, Controls,
Summary 316 and Tests of Controls 399
Input Controls 400
CHAPTER 8 Process Controls 403
Output Controls 408
Data Structures and CAATTs for Data Testing Output Controls 409
Extraction 321 Substantive Tests of Revenue Cycle Accounts 410
Data Structures 322 Revenue Cycle Risks and Audit Concerns 410
Flat-File Structures 322 Understanding Data 411
Indexed Structure 323 Testing the Accuracy and Completeness Assertions 414
Hashing Structure 327 Testing the Existence Assertion 420
Pointer Structures 328 Testing the Valuation/Allocation Assertion 424
Hierarchical and Network Database Structures 330 Summary 426
Relational Database Structure, Concepts, Appendix 427
and Terminology 332
Relational Database Concepts 333
Anomalies, Structural Dependencies, and Data CHAPTER 10
Normalization 338 Auditing the Expenditure Cycle 459
Designing Relational Databases 344
Expenditure Cycle Activities and Technologies 460
Identify Entities 344
Purchases and Cash Disbursement Procedures Using
Construct a Data Model Showing Entity Associations
Batch-Processing Technology 460
(Cardinality) 345
Cash Disbursements Department 463
Add Primary Keys and Attributes to the Model 347
Integrated Purchases and Cash Disbursements
Normalize Data Model and Add Foreign Keys 348
System 464
Construct the Physical Database 349
Overview of Payroll Procedures 467
Prepare the Physical User Views 351
Reengineering the Payroll System 468
Global View Integration 352
Commercial Database Systems 352
Expenditure Cycle Audit Objectives, Controls,
and Tests of Controls 471
Embedded Audit Module 353
Input Controls 471
354
Disadvantages of EAMs
Process Controls 476
Generalized Audit Software 354 Output Controls 480
Using GAS to Access Simple Structures 354
Substantive Tests of Expenditure Cycle Accounts 482
Using GAS to Access Complex Structures 355
Expenditure Cycle Risks and Audit Concerns 482
Audit Issues Pertaining to the Creation of Flat Files 356
Understanding Data 483
ACL Software 356 Testing the Accuracy and Completeness
Data Definition 357 Assertions 486
Customizing a View 359 Testing the Completeness, Existence, and Rights and
Filtering Data 360 Obligations Assertions 492
Stratifying Data 362 Auditing Payroll and Related Accounts 494
Statistical Analysis 362
Summary 494
Summary 363
Appendix 495
Appendix 364
CHAPTER 9 CHAPTER 11
Auditing the Revenue Cycle 385 Enterprise Resource Planning System 533
Revenue Cycle Activities and Technologies 385 What Is an ERP? 534
Batch-Processing Sales Order System 386 ERP Core Applications 536
Obtain and Record Customers’ Orders 386 Online Analytical Processing 536
viii Contents
ERP System Configurations 537 Privacy 568

Server Configurations 537 Security (Accuracy and Confidentiality) 568
OLTP versus OLAP Servers 538 Ownership of Property 569
Database Configuration 540 Equity in Access 569
Bolt-on Software 540 Environmental Issues 569
Data Warehousing 541 Artificial Intelligence 570
Modeling Data for the Data Warehouse 542 Unemployment and Displacement 570
Extracting Data from Operational Databases 543 Misuse of Computers 570
Cleansing Extracted Data 543 Sarbanes-Oxley Act and Ethical Issues 571
Transforming Data into the Warehouse Model 545 Section 406—Code of Ethics for Senior Financial
Loading the Data into the Data Warehouse Officers 571
Database 546 Fraud and Accountants 572
Decisions Supported by the Data Warehouse 546 Definitions of Fraud 572
Supporting Supply Chain Decisions from the Data The Fraud Triangle 573
Warehouse 547 Financial Losses from Fraud 575
Risks Associated with ERP Implementation 548 The Perpetrators of Frauds 575
Big Bang versus Phased-in Implementation 548 Fraud Losses by Position within the Organization 576
Opposition to Changes in the Business’s Culture 549 Fraud Losses and the Collusion Effect 576
Choosing the Wrong ERP 549 Fraud Losses by Gender 576
Choosing the Wrong Consultant 551 Fraud Losses by Age 577
High Cost and Cost Overruns 552 Fraud Losses by Education 577
Disruptions to Operations 552 Conclusions to be Drawn 578
Implications for Internal Control and Auditing 553 Fraud Schemes 578
Transaction Authorization 553 Fraudulent Statements 578
Segregation of Duties 553 Corruption 581
Supervision 554 Asset Misappropriation 582
Accounting Records 554 Computer Fraud 585
Independent Verification 554 Auditor’s Responsibility for Detecting Fraud 589
Access Controls 555 Fraudulent Financial Reporting 589
Internal Control Issues Related to ERP Roles 556 Misappropriation of Assets 590
Contingency Planning 558 Auditor’s Response to Assess Risk 590
Summary 558 Response to Detected Misstatements Due to Fraud 590
Documentation Requirements 591
Fraud Detection Techniques 591
CHAPTER 12 Payments to Fictitious Vendors 591
Business Ethics, Fraud, and Payroll Fraud 593
Fraud Detection 565 Lapping Accounts Receivable 593
Summary 595
Ethical Issues in Business 566
Business Ethics 566
Making Ethical Decisions 566 Glossary 607
Computer Ethics 567
A New Problem or Just a New Twist on an Old Index 625
Problem? 568
Preface
IT AUDITING, 4th edition explores state-of-the-art audit issues to provide students

valuable insights into auditing in a modern computer-based environment. The book fo-
cuses on the information technology aspects of auditing, including coverage of transac-
tion processing, Sarbanes–Oxley (SOX) implications, audit risk, the Committee of
Sponsoring Organizations (COSO) control framework including general and application
control issues, fraud techniques and detection, IT outsourcing issues and concerns, and
enterprise system risks and controls. Several modules in the text draw upon ACL soft-
ware. This leading audit tool is supported through projects and cases that are linked to
specific chapter topics and provide students with hands-on experience in the use of ACL.
Revisions to existing material and the addition of new material in the 4th edition are
designed to keep students and instructors as updated as possible on IT auditing issues
in an ever-changing technology environment.
DISTINGUISHING FEATURES
A RISK ANALYSIS APPROACH. This text will help the instructor teach a risk-based
approach to the identification of key threats and to develop appropriate audit tests
and procedures in the following areas: Operating Systems, Data Management, Systems
Development, Electronic Commerce (including networks, EDI and Internet risks),
Organizational Structure, Computer Center, and Computer Applications (Revenue and
Expenditure cycle).
COMPUTER-AIDED AUDIT TOOLS and TECHNIQUES (CAATTs) are frequently
used organizations and auditors for testing internal controls and performing substantive
tests. This book presents these topics through written text and graphical illustrations to
create an easy-to-understand model for student learning. The book also includes numer-
ous assignments and projects that will enable students to develop hands-on expertise in
the use of ACL, a leading audit tool.
COMPUTER CONTROL ISSUES and their impact on both operational efficiency
and the auditor’s attest responsibility are central themes of this textbook. The book con-
tains numerous cases and problems designed to reinforce the learning objectives related
to these topics.
STRUCTURED PRESENTATION OF CHAPTER MATERIAL. For clarity and com-
parability, most chapters are structured along similar lines. They begin with a discussion
of the operational features and technologies employed in the area. They then lay out the
nature of the risks and explain the controls needed to mitigate such risks. Finally, the
chapters define specific audit objectives and present suggested audit procedures to
achieve those objectives.
ix
x Preface
NEW AND REVISED FEATURES

The fourth edition has been rigorously updated to include control and audit issues re-
lated to SAS 109, SAS 99, COSO, SSAE 16, and cloud computing. Specific revisions are
described next:
End of Chapter Material

The end-of-chapter material in the 4th edition has undergone significant revision. Virtu-
ally all multiple-choice question and most of the problems have been revised or replaced.
This important body of material is tailored to the chapters’ contents, and the solutions
provided in the solutions manual accurately reflect the problem requirements. In partic-
ular, great attention was paid to internal control and fraud case solutions to ensure con-
sistency in appearance and an accurate reflection of the cases in the text. All case
solution flowcharts are numerically coded and cross-referenced to text that explains the
internal control issues. This approach, which has been classroom tested, facilitates effec-
tive presentation of internal control and fraud case materials.
Updated Chapters 1 through 5

An Updated Chapter 1, Auditing, Assurance, and Internal Control, provides an overview
of IT audit issues and auditor responsibilities that follow SOX legislation, the COSO in-
ternal control model, and SAS 109. Chapter 2 has been revised to examine audit impli-
cations pertaining to Cloud Computing IT outsourcing including virtualization, Software
as a Service (SaaS), Infrastructure as a Service (IaaS), and Platform as a Service (PaaS).
The new standard for auditing service providers (SSAE 16) is discussed. Chapters 2–5
have been updated to present General Control and audit issues in accordance with SOX
and COSO framework
Revised Chapter 8, “Data Structures and CAATTs for Data Extraction”

At one time an accountant in the conduct of an audit could pull an invoice from a filing
cabinet. Today that invoice is most likely stored in structured pieces on several normal-
ized database tables and accessing it requires an understanding of relational database
structures. The chapter has been extensively rewritten to address this growing need for
modern auditors to have a working understanding of data modeling techniques. The
chapter presents the key characteristics of the relational database model including data
modeling, deriving relational tables from entity relationship (ER) diagrams, the creation
of user views, and data normalization techniques.
Revised Chapters 9 “Auditing the Revenue Cycle” and 10 “Auditing the Conversion Cycle”
Chapters 9 and 10 have been extensively revised with new diagrams, flowcharts, and text.
Each chapter begins with a review of alternative technologies commonly employed in
computer systems. This review is followed by the audit objectives, controls, and tests of
controls that an auditor would normally perform. The end of chapter internal control
cases have all been revised or replaced.
Preface xi
Updated Chapter 12, Business Ethics, Fraud Schemes, and Fraud Detection
This chapter addresses auditor responsibilities for detecting fraud. It has been revise to
include the latest report on occupational fraud and abuse by the Association of Fraud
Examiners.
Revised ACL Tutorials

These “how to” tutorials are located on the product Web site and have been revised to be
compliant with ACL 9.0. They make it easy for students to quickly understand ACL’s
extensive capabilities and master its use.
Revised Bradmark ACL Case

To better integrate ACL into the classroom we have revised the Bradmark ACL case,
which spans Chapters 9, 10 and 12. This case will enable students to apply many con-
cepts presented in the book using ACL software.
NEW PowerPoint Slides. These downloadable slides, are tightly integrated to the
text and contain text page references, exhibits, lecture points, and topic summaries.
ORGANIZATION AND CONTENT

Chapter 1, “Auditing and Internal Control”
This chapter provides an overview of IT auditing. It describes the various types of audits
that organizations commission. The chapter distinguishes between the auditor’s tradi-
tional attestation responsibility and the expanding field of advisory services. It goes on
to explain the structure of an IT audit, the relationship between management assertions,
audit objectives, tests of controls, and substantive tests. The chapter also outlines the key
points of the COSO control framework, which defines internal controls in both manual
and IT environments. The final section of the chapter examines audit issues and implica-
tions related to SOX legislation and provides a conceptual framework that links general
controls, application controls, and financial data integrity. This framework is a model for
the remainder of the text.
Chapter 2, “Auditing IT Governance Controls”

This chapter presents the risks, controls, and tests of controls related to IT governance. It
opens by definiting IT governance and identifying elements of IT governance that have
internal control and financial reporting implications. The topics covered include struc-
turing of the IT function, computer center threats and controls, and disaster recovery
planning. The chapter also examines the risks and benefits of IT outsourcing. It con-
cludes with a discussion of audit issues in an outsourcing environment and the role of
the SSAE 16 report.
xii Preface
Chapter 3, “Security Part I: Auditing Operating Systems and Networks”

This chapter focuses on SOX compliance regarding the security and control of oper-
ating systems, communication networks, Electronic Data Interchange, and PC-based
accounting systems. The chapter examines the risks, controls, audit objectives, and
audit procedures that may be performed to satisfy either compliance or attest
responsibilities.
Chapter 4, “Security Part II: Auditing Database Systems”

The focus of the chapter is on SOX compliance regarding the security and control of
organization databases. The chapter opens with a description of flat-file data manage-
ment, which is used in many older (legacy) systems that are still in operation today.
The chapter then presents a conceptual overview of the database model and illustrates
how problems associated with the flat-file model are resolved under this approach. The
chapter outlines the key functions and defining features of three common database mod-
els: the hierarchical, the network, and the relational models. Both centralized and distrib-
uted database systems are discussed. The chapter concludes by presenting the risks, audit
objectives, and audit procedures relevant to flat files, centralized databases, and distrib-
uted database systems.
Chapter 5, “Systems Development and Program Change Activities”

This chapter concludes our treatment of general control issues as they relate to manage-
ment and auditor responsibilities under SOX Section 404. It begins by describing the
roles of the participants involved in developing an organization’s information system, in-
cluding systems professionals, users, and stakeholders. Then it outlines the key activities
that constitute the systems development life cycle (SDLC). These include systems plan-
ning, systems analysis, conceptual design, system selection, detailed design, system im-
plementation, and program change procedures (systems maintenance). This multistage
procedure is used to guide systems development in many organizations. Finally, it dis-
cusses SDLC risks, controls, and audit issues.
Chapter 6, “Transaction Processing and Financial Reporting Systems Overview”

This chapter provides an overview of transaction processing systems (TPS) and Finan-
cial Reporting Systems (FRS) and presents topics that are common to all TPS and FRS
applications. Subsequent chapters draw heavily from this material as we examine the
individual systems in detail. The chapter is organized into seven major sections. The
first is an overview of transaction processing. This section defines the broad objectives
of the three primary transaction cycles and specifies the roles of their individual sub-
systems. The second section describes the relationship among accounting records in
forming an audit trail in both manual and computer-based systems. The third section
examines documentation techniques used to represent both manual and computer-
based systems. The fourth section reviews the fundamental features of batch and real-
time technologies and their implication for transaction processing. The fifth section
examines data coding schemes and their role in transaction processing. The sixed sec-
tion of the chapter illustrates the central role of the general ledger as a hub that con-
nects TPS applications and provides input to the FRS. Finally, the chapter reviews the
control and audit issues related to XBRL (extendable business reporting language) in-
itiatives implemented the SEC.
Preface xiii
Chapter 7, “Computer-Assisted Audit Tools and Techniques”

Chapter 7 presents the use of Computer-Assisted Audit Tools and Techniques
(CAATTs) for performing tests of application controls. The chapter begins with an ex-
tensive description of application controls organized into three classes: input controls,
process controls, and output controls. It examines both the black box (audit around)
and white box (audit through) approaches to testing application controls. The latter
approach requires a detailed understanding of the application’s logic. The chapter dis-
cusses five CAATT approaches used for testing application logic. These are the test data
method, base case system evaluation, tracing, integrated test facility, and parallel simulation.
Chapter 8, “CAATTs for Data Extraction and Analysis”

Chapter 8 examines the uses of CAATTs for data extractions and analysis. Auditors make
extensive use of these tools in gathering accounting data for testing application controls
and in performing substantive tests. In an IT environment, the records needed to perform
such tests are stored in computer files and databases. Understanding how data are orga-
nized and accessed is central to using data extraction tools. For this reason, a thorough
review of common flat-file and database structures is provided. Considerable attention is
devoted to relational databases, since this is the most common data structure used by mod-
ern business organizations. The coverage includes relational concepts, terminology, table-
linking techniques, database normalization, and database design procedures.
Data extraction software fall into two general categories: embedded audit modules
(EAM) and general audit software (GAS). The chapter describes the features, advantages,
and disadvantages of both. The chapter closes with a review of the key features of ACL,
the leading GAS product on the market.
Chapters 9 and 10, “Auditing the Revenue Cycle” and “Auditing the Expenditure Cycle”
Auditing procedures associated with the revenue and expenditure cycles are examined in
Chapters 9 and 10 respectively. Each chapter begins with a review of alternative technol-
ogies commonly employed in computer systems. This review is followed by the audit ob-
jectives, controls, and tests of controls that an auditor would normally perform to gather
the evidence needed to limit the scope, timing, and extent of substantive tests. Finally,
the substantive tests related to audit objectives are explained and illustrated using ACL
software. End-of-chapter material contains several ACL assignments including a compre-
hensive assignment, which spans Chapters 9, 10 and 12. An appendix to each chapter
provides the reader with a detailed description of the activities and procedures that con-
stitute the respective cycle and with the key accounting records and documents em-
ployed in transaction processing.
Chapter 11, “Enterprise Reasource Planning Systems”

This chapter presents a number of issues related to the implementation and audit of
enterprise resource planning (ERP) systems. It is comprised of five major sections.
• The first section outlines the key features of a generic ERP system by comparing the
function and data storage techniques of a traditional flat-file or database system to
that of an ERP.
• The second section describes various ERP configurations related to servers, data-
bases, and bolt-on software.
• Data warehousing is the topic of the third section. A data warehouse is a relational
or multidimensional database that supports online analytical processing (OLAP). A
xiv Preface
number of issues are discussed, including data modeling, data extraction from oper-
ational databases, data cleansing, data transformation, and loading data into the
warehouse.
• The fourth section examines risks associated with ERP implementation. These in-
clude “big bang” issues, opposition to change within the organization, choosing the
wrong ERP model, choosing the wrong consultant, cost overrun issues, and disrup-
tions to operations.
• The fifth section reviews control and auditing issues related to ERPs. The discus-
sion follows the COSO control framework and addresses the significant risks associ-
ated with role granting activities.
Chapter 12, “Business Ethics, Fraud, and Fraud Detection”

Perhaps no aspect of the independent auditor’s role has caused more public and pro-
fessional concern than the external auditor’s responsibility for detecting fraud during
an audit. Recent major financial frauds have heightened public awareness of frauds
and to the terrible damage it can cause. This chapter examines the closely related
subjects of ethics and fraud and their implications for auditing. It begins with a sur-
vey of ethical issues that highlight the organization’s conflicting responsibilities to its
employees, shareholders, customers, and the general public. Management, employees,
and auditors need to recognize the implications of new information technologies for
such traditional issues as working conditions, the right to privacy, and the potential
for fraud. The section concludes with a review of the code of ethics requirements that
SOX mandates.
The chapter then considers basic fraud issues beginning with a definition of fraud.
The chapter examines the nature and meaning of fraud, differentiates between em-
ployee fraud and management fraud, explains fraud-motivating forces, and reviews
common fraud techniques. The chapter outlines the key features of SAS 99, “Consider-
ation of Fraud in a Financial Statement Audit,” and presents the results of a fraud re-
search project conducted by the Association of Certified Fraud Examiners (ACFE).
Finally, the chapter presents a number of specific fraud schemes and fraud detection
techniques that are used in practice. The discussion follows the fraud classification for-
mat derived by the ACFE, which defines three broad categories of fraud schemes:
fraudulent statements, corruption, and asset misappropriation. The chapter presents
several ACL tests that auditors can perform to help them detect fraud. The end-of-
chapter material contains a number of ACL fraud exercises as well as an integrated
fraud case. The fraud assignments and their associated data may be downloaded from
this book’s Web site.
SUPPLEMENTS
NEW PowerPoint TM slides provide valuable lecture and study aids, charts, lists, defini-
tions, and summaries directly correlated with the text.
The Solutions Manual, written by the author, contains answers to all of the end-of-
chapter problem material in the text.
The Product Web site contains revised ACL tutorials, a revised Bradmark ACL
case, and data files along with instructor solutions. These exercises and cases are tied to
chapters in the text.
Preface xv
ACKNOWLEDGMENTS
We wish to thank the following reviewers for their useful and perceptive comments:
Faye Borthick Hema Rao
(Georgia State University) (SUNY-Oswego)
John Coulter Chuck Stanley
(Western New England College) (Baylor University)
Lori Fuller Tommie Singleton
(Widener University) (University of Alabama at Birmingham)
Jongsoo Han Brad Tuttle
(Rutgers University) (University of South Carolina)
Sharon Huxley Douglas Ziegenfuss
(Teikyo Post University) (Old Dominion)
Louis Jacoby
(Saginaw Valley State University)
Orlando Katter
(Winthrop University)
Jim Kurtenbach
(Iowa State University)
Nick McGaughey
(San Jose State University)
Rebecca Rosner
(Long Island University—
CW Post Campus)
We wish to thank ACL Services, Ltd. for its cooperation in the development of the
this and for its permission to reprint screens from the software in the text.
ABOUT THE AUTHOR

James A. Hall is Professor of Accounting, Co-Director of the Computer Science and
Business program, and the Peter E. Bennett Chair in Business and Economics at Lehigh
University in Bethlehem, PA. After his discharge from the U.S. Army, he entered the
University of Tulsa in 1970 and received a BSBA in 1974 and an MBA in 1976. He
earned his Ph.D. from Oklahoma State University in 1979. Hall has worked in the field
of systems analysis and computer auditing, and has served as consultant in these areas to
numerous organizations. Professor Hall has published articles in the Journal of Account-
ing, Auditing & Finance; Journal of MIS; Communications of the ACM; Journal of Man-
agement Systems; Management Accounting; Journal of Computer Information Systems;
The Journal of Accounting Education; The Review of Accounting Information Systems;
and other professional journals. He is the author of Accounting Information Systems,
9th edition, published by South-Western College Publishing. His research interests in-
clude internal controls, computer fraud, and IT outsourcing.
CHAPTER 1
Auditing and Internal Control
LEARNING OBJECTIVES
After studying this chapter, you should:
• Know the difference between attest services and advisory services and be able to
explain the relationship between the two.
• Understand the structure of an audit and have a firm grasp of the conceptual elements of
the audit process.
• Understand internal control categories presented in the COSO framework.
• Be familiar with the key features of Section 302 and 404 of the Sarbanes–Oxley Act.
• Understand the relationship between general controls, application controls, and financial
data integrity.
evelopments in information technology (IT) have had a tremendous impact on

D the field of auditing. IT has inspired the reengineering of traditional business
processes to promote more efficient operations and to improve communications
within the entity and between the entity and its customers and suppliers. These
advances, however, have introduced new risks that require unique internal controls.
They have engendered the need for new techniques for evaluating controls and for
assuring the security and accuracy of corporate data and the information systems
that produce it.
This chapter provides an overview of IT auditing. We begin by describing the
various types of audits that organizations commission and distinguish between the
auditor’s traditional attestation responsibility and the emerging field of advisory ser-
vices. We go on to explain the structure of an IT audit: the relationship between
management assertions, audit objectives, tests of controls, and substantive tests are
explained. The chapter also outlines the key points of the Committee of Sponsoring
Organizations (COSO) control framework, which defines internal controls in both
manual and IT environments. The final section of the chapter examines audit issues
and implications related to Sarbanes–Oxley legislation and provides a conceptual
framework that links general controls, application controls, and financial data integ-
rity. This framework is a model for the remainder of the text.
1
2 Chapter 1: Auditing and Internal Control
OVERVIEW OF AUDITING
Business organizations undergo different types of audits for different purposes. The most
common of these are external (financial) audits, internal audits, and fraud audits. Each of
these is briefly outlined in the following sections.
External (Financial) Audits

An external audit is an independent attestation performed by an expert—the auditor—
who expresses an opinion regarding the presentation of financial statements. This task,
known as the attest service, is performed by Certified Public Accountants (CPAs) who
work for public accounting firms that are independent of the client organization being
audited. The audit objective is always associated with assuring the fair presentation of
financial statements. These audits are, therefore, often referred to as financial audits.
The Securities and Exchange Commission (SEC) requires all publicly traded companies
be subject to a financial audit annually. CPAs conducting such audits represent the inter-
ests of outsiders: stockholders, creditors, government agencies, and the general public.
The CPA’s role is similar in concept to a judge who collects and evaluates evidence
and renders an opinion. A key concept in this process is independence. The judge must
remain independent in his or her deliberations. The judge cannot be an advocate of
either party in the trial, but must apply the law impartially based on the evidence pre-
sented. Likewise, the independent auditor collects and evaluates evidence and renders an
opinion based on the evidence. Throughout the audit process, the auditor must maintain
independence from the client organization. Public confidence in the reliability of the
company’s internally produced financial statements rests directly on an evaluation of
them by an independent auditor.
The external auditor must follow strict rules in conducting financial audits. These
authoritative rules have been defined by the SEC, the Financial Accounting Standards
Board (FASB), the American Institute of CPA (AICPA), and by federal law (Sarbanes–
Oxley [SOX] Act of 2002). With the passage of SOX, Congress established the Public
Company Accounting Oversight Board (PCAOB), which has to a great extent replaced
the function served by the FASB, and some of the functions of the AICPA (e.g., setting
standards and issuing reprimands and penalties for CPAs who are convicted of certain
crimes or guilty of certain infractions). Regardless, under federal law, the SEC has final
authority for financial auditing.
Attest Service versus Advisory Services

An important distinction needs to be made regarding the external auditor’s traditional
attestation service and the rapidly growing field of advisory services, which many public
accounting firms offer. The attest service is defined as:
an engagement in which a practitioner is engaged to issue, or does issue, a written
communication that expresses a conclusion about the reliability of a written asser-
tion that is the responsibility of another party. (SSAE No. 1, AT Sec. 100.01)
The following requirements apply to attestation services:

• Attestation services require written assertions and a practitioner’s written report.
• Attestation services require the formal establishment of measurement criteria or
their description in the presentation.
Overview of Auditing 3
• The levels of service in attestation engagements are limited to examination, review,

and application of agreed-upon procedures.
Advisory services are professional services offered by public accounting firms to
improve their client organizations’ operational efficiency and effectiveness. The domain
of advisory services is intentionally unbounded so that it does not inhibit the growth of
future services that are currently unforeseen. As examples, advisory services include actu-
arial advice, business advice, fraud investigation services, information system design and
implementation, and internal control assessments for compliance with SOX.
Prior to the passage of SOX, accounting firms could provide advisory services con-
currently to audit (attest function) clients. SOX legislation, however, greatly restricts the
types of nonaudit services that auditors may render to audit clients. It is now unlawful
for a registered public accounting firm that is currently providing attest services for a
client to provide the following services:
• bookkeeping or other services related to the accounting records or financial state-
ments of the audit client
• financial information systems design and implementation
• appraisal or valuation services, fairness opinions, or contribution-in-kind reports
• actuarial services
• internal audit outsourcing services
• management functions or human resources
• broker or dealer, investment adviser, or investment banking services
• legal services and expert services unrelated to the audit
• any other service that the board determines, by regulation, is impermissible
The advisory services units of public accounting firms responsible for providing IT
control-related client support have different names in different firms, but they all engage
in tasks known collectively as IT risk management. These groups often play a dual role
within their respective firms; they provide nonaudit clients with IT advisory services and
also work with their firm’s financial audit staff to perform IT-related tests of controls as
part of the attestation function.
The material outlined in this chapter relates to tasks that risk management profes-
sionals normally conduct during an IT audit. In the pages that follow, we examine what
constitutes an audit and how audits are structured. Keep in mind, however, that in many
cases the purpose of the task, rather than the task itself, defines the service being ren-
dered. For example, a risk management professional may perform a test of IT controls
as an advisory service for a nonaudit client who is preparing for a financial audit by a
different public accounting firm. The same professional may perform the very same test
for an audit client as part of the attest function. Therefore, the issues and procedures
described in this text apply to a broader context that includes advisory services and attes-
tation, as well as the internal audit function.
Internal Audits
The Institute of Internal Auditors (IIA) defines internal auditing as an independent
appraisal function established within an organization to examine and evaluate its activities
as a service to the organization.1 Internal auditors perform a wide range of activities on
behalf of the organization, including conducting financial audits, examining an operation’s
1 AAA Committee on Basic Auditing Concepts, “A Statement of Basic Auditing Concepts,” Accounting Review,
supplement to vol. 47, 1972.
compliance with organizational policies, reviewing the organization’s compliance with

legal obligations, evaluating operational efficiency, and detecting and pursuing fraud within
the firm.
An internal audit is typically conducted by auditors who work for the organization, but
this task may be outsourced to other organizations. Internal auditors are often certified as a
Certified Internal Auditor (CIA) or a Certified Information Systems Auditor (CISA). While
internal auditors self-impose independence to perform their duties effectively, they represent
the interests of the organization. These auditors generally answer to executive management
of the organization or the audit committee of the board of directors, if one exists. The stan-
dards, guidance, and certification of internal audits are governed mostly by the IIA and, to a
lesser degree, by the Information Systems Audit and Control Association (ISACA).
External versus Internal Auditors

The characteristic that conceptually distinguishes external auditors from internal auditors
is their respective constituencies: while external auditors represent outsiders, internal
auditors represent the interests of the organization. Nevertheless, in this capacity, inter-
nal auditors often cooperate with and assist external auditors in performing aspects of
financial audits. This cooperation is done to achieve audit efficiency and reduce audit
fees. For example, a team of internal auditors can perform tests of computer controls
under the supervision of a single external auditor.
The independence and competence of the internal audit staff determine the extent to
which external auditors may cooperate with and rely on work performed by internal audi-
tors. Internal audit independence implies no subordination of judgment to another and
arises from an independent mental attitude that views events on a factual basis without
influence from an organizational structure that subordinates the internal audit function.
Some internal audit departments report directly to the controller. Under this arrangement,
the internal auditor’s independence is compromised, and the external auditor is prohibited
by professional standards from relying on evidence provided by the internal auditors. In
contrast, external auditors can rely in part on evidence gathered by internal audit depart-
ments that are organizationally independent and report to the board of directors’ audit
committee (discussed next). A truly independent internal audit staff adds value to the
audit process. For example, internal auditors can gather audit evidence throughout a fiscal
period, which external auditors may then use at the year’s end to conduct more efficient,
less disruptive, and less costly audits of the organization’s financial statements.
Fraud Audits
In recent years, fraud audits have, unfortunately, increased in popularity as a corporate
governance tool. They have been thrust into prominence by a corporate environment in
which both employee theft of assets and major financial frauds by management (e.g.,
Enron, WorldCom) have become rampant. The objective of a fraud audit is to investi-
gate anomalies and gather evidence of fraud that may lead to criminal conviction. Some-
times fraud audits are initiated by corporate management who suspect employee fraud.
Alternatively, boards of directors may hire fraud auditors to look into their own execu-
tives if theft of assets or financial fraud is suspected. Organizations victimized by fraud
usually contract with specialized fraud units of public accounting firms or with compa-
nies that specialize in forensic accounting. Typically, fraud auditors have earned the Cer-
tified Fraud Examiner (CFE) certification, which is governed by the Association of
Certified Fraud Examiners (ACFE).
Financial Audit Components 5
THE ROLE OF THE AUDIT COMMITTEE

The board of directors of publicly traded companies form a subcommittee known as
the audit committee, which has special responsibilities regarding audits. This commit-
tee usually consists of three people who should be outsiders (not associated with the
families of executive management nor former officers, etc.). With the advent of the
Sarbanes–Oxley Act, at least one member of the audit committee must be a “financial
expert.” The audit committee serves as an independent “check and balance” for the
internal audit function and liaison with external auditors. One of the most significant
changes imposed by SOX has been to the relationship between management and the
external auditors. Prior to SOX, external auditors were hired and fired by manage-
ment. Many believe, with some justification, that this relationship erodes auditor inde-
pendence when disputes over audit practices arise. SOX mandates that external
auditors now report to the audit committee who hire and fire auditors and resolve
disputes.
To be effective, the audit committee must be willing to challenge the internal audi-
tors (or the entity performing that function) as well as management, when necessary.
Part of its role is to look for ways to identify risk. For instance, it might serve as a sound-
ing board for employees who observe suspicious behavior or spot fraudulent activities. In
general, it becomes an independent guardian of the entity’s assets by whatever means is
appropriate. Corporate frauds often have some bearing on audit committee failures.
These include lack of independence of audit committee members, inactive audit commit-
tees, total absence of an audit committee, and lack of experienced members on the audit
committee.
FINANCIAL AUDIT COMPONENTS

The product of the attestation function is a formal written report that expresses an opin-
ion about the reliability of the assertions contained in the financial statements. The audi-
tor’s report expresses an opinion as to whether the financial statements are in conformity
with generally accepted accounting principles (GAAP); external users of financial state-
ments are presumed to rely on the auditor’s opinion about the reliability of financial
statements in making decisions. To do so, users must be able to place their trust in the
auditor’s competence, professionalism, integrity, and independence. Auditors are guided
in their professional responsibility by the 10 generally accepted auditing standards
(GAAS) presented in Table 1.1.
Auditing Standards
Auditing standards are divided into three classes: general qualification standards, field
work standards, and reporting standards. GAAS establishes a framework for prescribing
auditor performance, but it is not sufficiently detailed to provide meaningful guidance in
specific circumstances. To provide specific guidance, the AICPA issues Statements on
Auditing Standards (SASs) as authoritative interpretations of GAAS. SASs are often
referred to as auditing standards, or GAAS, although they are not the 10 generally
accepted auditing standards.
The first SAS (SAS 1) was issued by the AICPA in 1972. Since then, many SASs
have been issued to provide auditors with guidance on a spectrum of topics, including
methods of investigating new clients, procedures for collecting information from
TABLE 1.1 Generally Accepted Auditing Standards

General Standards Standards of Field Work Reporting Standards
1. The auditor must have adequate technical 1. Audit work must be adequately 1. The auditor must state in the report
training and proficiency. planned. whether financial statements were pre-
pared in accordance with generally
accepted accounting principles.
2. The auditor must have independence of 2. The auditor must gain a sufficient 2. The report must identify those circum-
mental attitude. understanding of the internal control stances in which generally accepted
structure. accounting principles were not applied.
3. The auditor must exercise due professional 3. The auditor must obtain sufficient, 3. The report must identify any items
care in the performance of the audit and the competent evidence. that do not have adequate informative
preparation of the report. disclosures.
4. The report shall contain an expression
of the auditor’s opinion on the financial
statements as a whole.
attorneys regarding contingent liability claims against clients, and techniques for obtain-
ing background information on the client’s industry.
Statements on Auditing Standards are regarded as authoritative pronouncements
because every member of the profession must follow their recommendations or be able
to show why a SAS does not apply in a given situation. The burden of justifying depar-
tures from the SASs falls upon the individual auditor.
A Systematic Process
Conducting an audit is a systematic and logical process that applies to all forms of infor-
mation systems. While important in all audit settings, a systematic approach is particu-
larly important in the IT environment. The lack of physical procedures that can be
visually verified and evaluated injects a high degree of complexity into the IT audit
(e.g., the audit trail may be purely electronic, in a digital form, and thus invisible to
those attempting to verify it). Therefore, a logical framework for conducting an audit in
the IT environment is critical to help the auditor identify all-important processes and
data files.
Management Assertions and Audit Objectives

The organization’s financial statements reflect a set of management assertions about the
financial health of the entity. The task of the auditor is to determine whether the finan-
cial statements are fairly presented. To accomplish this goal, the auditor establishes audit
objectives, designs procedures, and gathers evidence that corroborate or refute manage-
ment’s assertions. These assertions fall into five general categories:
1. The existence or occurrence assertion affirms that all assets and equities contained
in the balance sheet exist and that all transactions in the income statement actually
occurred.
2. The completeness assertion declares that no material assets, equities, or transactions
have been omitted from the financial statements.
Financial Audit Components 7
3. The rights and obligations assertion maintains that assets appearing on the balance
sheet are owned by the entity and that the liabilities reported are obligations.
4. The valuation or allocation assertion states that assets and equities are valued in
accordance with GAAP and that allocated amounts such as depreciation expense
are calculated on a systematic and rational basis.
5. The presentation and disclosure assertion alleges that financial statement items are
correctly classified (e.g., long-term liabilities will not mature within one year) and
that footnote disclosures are adequate to avoid misleading the users of financial
statements.
Generally, auditors develop their audit objectives and design audit procedures based
on the preceding assertions. The example in Table 1.2 outlines these procedures.
Audit objectives may be classified into two general categories. Those in Table 1.2
relate to transactions and account balances that directly impact financial reporting. The
second category pertains to the information system itself. This category includes the
audit objectives for assessing controls over manual operations and computer technologies
used in transaction processing. In the chapters that follow, we consider both categories of
audit objectives and the associated audit procedures.
Obtaining Evidence
Auditors seek evidential matter that corroborates management assertions. In the IT envi-
ronment, this process involves gathering evidence relating to the reliability of computer
controls as well as the contents of databases that have been processed by computer pro-
grams. Evidence is collected by performing tests of controls, which establish whether
internal controls are functioning properly, and substantive tests, which determine
whether accounting databases fairly reflect the organization’s transactions and account
balances.
Ascertaining Materiality
The auditor must determine whether weaknesses in internal controls and misstatements
found in transactions and account balances are material. In all audit environments,
TABLE 1.2 Audit Objectives and Audit Procedures Based

on Management Assertions
Management Assertion Audit Objective Audit Procedure
Existence or occurrence Inventories listed on the balance sheet exist. Observe the counting of physical inventory.
Completeness Accounts payable include all obligations to Compare receiving reports, supplier invoices,
vendors for the period. purchase orders, and journal entries for the
period and the beginning of the next period.
Rights and obligations Plant and equipment listed in the balance Review purchase agreements, insurance poli-
sheet are owned by the entity. cies, and related documents.
Valuation or allocation Accounts receivable are stated at net Review entity’s aging of accounts and evaluate
realizable value. the adequacy of the allowance for uncorrectable
accounts.
Presentation and disclosure Contingencies not reported in financial Obtain information from entity lawyers about the
accounts are properly disclosed in footnotes. status of litigation and estimates of potential loss.
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against harboring her. It has been plain to see in all such cases
which I have chanced upon in colonial records that the Court had a
strong leaning towards the husband’s side of the case; perhaps
thinking, like Anneke Schaets, that the wife should “share the sweets
and the sours like a Christian spouse.”
In 1697 Daniel Vanolinda petitioned that his wife be “ordyred to go
and live with him where he thinks convenient.” The wife’s father was
promptly notified by the Albany magistrates that he was “discharged
to shelter her in his house or elsewhere, upon Penalty as he will
answer at his Perill;” and she returned to her husband.
In the year 1665 a New Amsterdammer named Lantsman and his
wife, Beletje, were sorely estranged, and went to the courts for
settlement of these differences. The Court gave the matter into the
hands of two of the Dutch ministers, who were often assigned the
place of peacemakers. As usual, they ordered the parents of Beletje
to cease from harboring or abetting her. The husband promised to
treat her well, but she answered that he always broke his promises
to her. He was determined and assiduous to retrieve her, and finally
was successful; thus they were not made “an example to other evil
housekeepers.” A curious feature of this marriage quarrel is the fact
that this Lantsman, who was so determined to retain his wife, had
been more than recreant about marrying her. The banns had been
published, the wedding-day set, but Bridegroom Lantsman did not
appear. Upon being hauled up and reprimanded, his only proffered
excuse was the very simple one that his clothes were not ready.
When Anniatje Fabritius requested an order of court for her
husband to vacate her house with a view of final separation from
him, it was decided by the arbitrators that no legal steps should be
taken, but that “the parties comport themselves as they ought, in
order that they win back each other’s affections, leaving each other
in meanwhile unmolested”—which was very sensible advice. Another
married pair having “met with great discouragement” (which is
certainly a most polite expression to employ on such a subject),
agreed each to go his and her way, after an exact halving of all their
possessions.
Nicasius de Sille, magistrate of New Utrecht and poet of New
Netherland, separated his life from that of his wife because—so he
said—she spent too much money. It is very hard for me to think of a
Dutch woman as “expensefull,” to use Pepys’ word. He also said she
was too fond of schnapps,—which her respected later life did not
confirm. Perhaps he spoke with poetic extravagance, or the nervous
irritability and exaggeration of genius. Albert Andriese and his wife
were divorced in Albany in 1670, “because strife and difference hath
arisen between them.” Daniel Denton was divorced from his wife in
Jamaica, and she was permitted to marry again, by the new
provincial law of divorce of 1672. These few examples break the
felicitous calm of colonial matrimony, and have a few companions
during the years 1670-72; but Chancellor Kent says “for more than
one hundred years preceding the Revolution no divorce took place in
the colony of New York;” and there was no way of dissolving a
marriage save by special act of Legislature.
Occasionally breach-of-promise suits were brought. In 1654
Greetje Waemans produced a marriage ring and two letters,
promissory of marriage, and requested that on that evidence Daniel
de Silla be “condemned to legally marry her.” He vainly pleaded his
unfortunate habit of some days drinking too much, and that on those
days he did much which he regretted; among other things, his
bacchanalian love-making of Greetje. François Soleil, the New
Amsterdam gunsmith, another recreant lover, swore he would rather
go away and live with the Indians (a terrible threat) than marry the
fair Rose whom he had left to droop neglected—and unmarried.
One curious law-case is shown by the injunction to Pieter Kock
and Anna van Voorst. They had entered into an agreement of
marriage, and then had been unwilling to be wedded. The
burgomasters and schepens decided that the promise should remain
in force, and that neither should marry any other person without the
permission of the other and the Court; but Anna did marry very
calmly (when she got ready) another more desirable and desired
man without asking any one’s permission.
It certainly gives us a great sense of the simplicity of living in those
days to read the account of the suit of the patroon of Staten Island in
1642 against the parents of a fair young Elsje for loss of services
through her marriage. She had been bound out to him as a servant,
and had married secretly before her time of service had expired. The
bride told the worshipful magistrates that she did not know the young
man when her mother and another fetched him to see her; that she
refused his suit several times, but finally married him willingly
enough,—in fact, eloped with him in a sail-boat. She demurely
offered to return to the Court, as compensation and mollification, the
pocket-handkerchief which was her husband’s wedding-gift to her.
Two years later, Elsje (already a widow) appeared as plaintiff in a
breach-of-promise suit; and offered, as proof of her troth-plight, a
shilling-piece which was her second lover’s not more magnificent
gift. Though not so stated in the chronicle, this handkerchief was
doubtless given in a “marriage-knot,”—a handkerchief in which was
tied a gift of money. If the girl to whom it was given untied the knot, it
was a sign of consent to be speedily married. This fashion of
marriage-knots still exists in parts of Holland. Sometimes the knot
bears a motto; one reads when translated, “Being in love does no
harm if love finds its recompense in love; but if love has ceased, all
labor is in vain. Praise God.”
Though second and third marriages were common enough among
the early settlers of New Netherland, I find that usually attempts at
restraint of the wife were made through wills ordering sequent loss of
property if she married again. Nearly all the wills are more favorable
to the children than to the wife. Old Cornelius Van Catts, of
Bushwick, who died in 1726, devised his estate to his wife Annetje
with this gruff condition: “If she happen to marry again, then I geff her
nothing of my estate, real or personal. But my wife can be master of
all by bringing up to good learning my two children. But if she comes
to marry again, then her husband can take her away from the farm.”
John Burroughs, of Newtown, Long Island, in his will dated 1678
expressed the general feeling of husbands towards their prospective
widows when he said, “If my wife marry again, then her husband
must provide for her as I have.”
Often joint-wills were made by husband and wife, each with equal
rights if survivor. This was peculiarly a Dutch fashion. In Fordham in
1670 and 1673, Claude de Maistre and his wife Hester du Bois,
Pierre Cresson and his wife Rachel Cloos, Gabriel Carboosie and
Brieta Wolferts, all made joint-wills. The last-named husband in his
half of the will enjoined loss of property if Brieta married again.
Perhaps he thought there had been enough marrying and giving in
marriage already in that family, for Brieta had had three husbands,—
a Dane, a Frieslander, and a German,—and his first wife had had
four, and he—well, several, I guess; and there were a number of
children; and you couldn’t expect any poor Dutchman to find it easy
to make a will in all that confusion. In Albany may be found several
joint-wills, among them two dated 1663 and 1676; others in the
Schuyler family. There is something very touching in the thought of
those simple-minded husbands and wives, in mutual confidence and
affection, going, as we find, before the notary together and signing
their will together, “out of love and special nuptial affection, not
thereto misled or sinisterly persuaded,” she bequeathing her dower
or her father’s legacy or perhaps her own little earnings, and he his
hard-won guilders. It was an act significant and emblematic of the
ideal unison of interests and purposes which existed as a rule in the
married life of these New York colonists.
Mrs. Grant adds abundant testimony to the domestic happiness
and the marital affection of residents of Albany a century later. She
states:—
“Inconstancy or even indifference among married couples
was unheard of, even where there happened to be a
considerable disparity in point of intellect. The extreme
affection they bore their mutual offspring was a bond that
forever endeared them to each other. Marriage in this colony
was always early, very often happy, and very seldom indeed
interested. When a man had no son, there was nothing to be
expected with a daughter but a well brought-up female slave,
and the furniture of the best bed-chamber. At the death of her
father she obtained another division of his effects, such as he
thought she needed or deserved, for there was no rule in
these cases.
“Such was the manner in which those colonists began life;
nor must it be thought that those were mean or uninformed
persons. Patriots, magistrates, generals, those who were
afterwards wealthy, powerful, and distinguished, all, except a
few elder brothers, occupied by their possessions at home,
set out in the same manner; and in after life, even in the most
prosperous circumstances, they delighted to recount the
‘humble toils and destiny obscure’ of their early years.”
Weddings usually took place at the house of the bride’s parents.
There are some records of marriages in church in Albany in the
seventeenth century, one being celebrated on Sunday. But certainly
throughout the eighteenth century few marriages were within the
church doors. Mrs. Vanderbilt says no Flatbush marriages took place
in the church till within the past thirty or forty years. In some towns
written permission of the parents of the groom, as well as the bride,
was required by the domine before he would perform the marriage
ceremony. In the Guelderland the express consent of father and
mother must be obtained before the marriage; and doubtless that
custom of the Fatherland caused its adoption here in some localities.
The minister also in some cases gave a certificate of permission for
marriage; here is one given by “ye minister at Flatbush,”—
Isaac Hasselburg and Elizabeth Baylis have had their
proclamation in our church as commonly our manner and
custom is, and no opposition or hindrance came against
them, so as that they may be confirmed in ye banns of
Matrimony, whereto we wish them blessing. Midwout ye
March 17th, 1689.
Rudolph Varrick, Minister.
This was probably to permit and authorize the marriage in another
parish.
Marriage fees were not very high in colonial days, nor were they
apparently always retained by the minister; for in one of Domine
Selyns’s accounts of the year 1662, we find him paying over to the
Consistory the sum of seventy-eight guilders and ten stuyvers for
fourteen marriage fees received by him. The expenses of being
married were soon increased by the issuing of marriage licenses.
During the century dating from the domination of the British to the
Revolutionary War nearly all the marriages of genteel folk were
performed by special permission, by Governor’s license, the
payment for which (a half-guinea each, so Kalm said) proved
through the large numbers a very welcome addition to the
magistrates’ incomes. It was in fact deemed most plebeian, almost
vulgar, to be married by publication of the banns for three Sundays in
church, or posting them according to the law, as was the universal
and fashionable custom in New England. This notice from a New
York newspaper, dated December 13, 1765, will show how
widespread had been the aversion to the publication of banns:—
“We are creditly informed that there was married last
Sunday evening, by the Rev. Mr. Auchmuty, a very
respectable couple that had published three different times in
Trinity Church. A laudable example and worthy to be followed.
If this decent and for many reasons proper method of
publication was once generally to take place, we should have
no more of clandestine marriages; and save the expense of
licenses, no inconsiderable sum these hard and depressing
times.”
Another reason for “crying the banns” was given in Holt’s “New
York Gazette and Postboy” for December 6, 1765.
“As no Licenses for Marriage could be obtained since the
first of November for Want of Stamped Paper, we can assure
the Publick several Genteel Couple were publish’d in the
different Churches of this City last Week; and we hear that the
young Ladies of this Place are determined to Join Hands with
none but such as will to the utmost endeavour to abolish the
Custom of marrying with License which Amounts to many
Hundred per annum which might be saved.”
Severe penalties were imposed upon clergymen who violated the
law requiring license or publication ere marriage. The Lutheran
minister performed such a marriage, and the schout’s “conclusion”
as to the matter was that the offending minister be flogged and
banished. But as he was old, and of former good services, he was at
last only suspended a year from power of preaching.
Rev. Mr. Miller, an English clergyman writing in 1695, complains
that many marriages were by justices of the peace. This was made
lawful by the States-General of Holland from the year 1590, and thus
was a law in New Netherland. By the Duke’s Laws, 1664, it was also
made legal. This has never been altered, and is to-day the law of the
State.
Of highly colored romance in the life of the Dutch colonists there
was little. Sometimes a lover was seized by the Indians, and his fair
betrothed mourned him through a long life. In one case she died
after a few years of grief and waiting, and on the very day of his
return from his savage prison to his old Long Island home he met the
sad little funeral procession bearing her to the grave. Another
humbler romance of Gravesend was when a sorrowing widower fell
in love with a modest milkmaid at first sight as she milked her
father’s cows; ere the milking was finished he told his love, rode to
town on a fast horse for a governor’s license, and married and
carried off his fair Grietje. A century later a fair Quakeress of
Flushing won in like manner, when milking, the attention and
affection of Walter Franklin of New York. Another and more strange
meeting of lovers was when young Livingstone, the first of the name
in New York, poor and unknown, came to the bedside of a dying Van
Rensselaer in Albany to draw up a will. The dying man, with a
jealousy stronger than death, said to his beautiful wife, Alida
Schuyler, “Send him away, he will be your second husband;” and he
was,—perhaps the thought provoked the deed.
Even if there were few startling or picturesque romances or
brilliant matches, there was plenty of ever-pleasant wooing. New
Amsterdam was celebrated, just before its cession to the English, for
its young and marriageable folk and its betrothals. This is easily
explained; nearly all the first emigrants were young married people,
and the years assigned to one generation had passed, and their
children had grown up and come to mating-time. Shrewd travellers,
who knew where to get good capable wives, wooed and won their
brides among the Dutch-American fair ones. Mr. Valentine says:
“Several of the daughters of wealthy burghers were mated to young
Englishmen whose first occasions were of a temporary character.”
The beautiful surroundings of the little town tempted all to love-
making, and the unchaperoned simplicity of society aided early
“matching.” The Locust-Trees, a charming grove on a bluff elevation
on the North River a little south of the present Trinity Churchyard,
was a famous courting-place; or tender lovers could stroll down the
“Maiden’s Path;” or, for still longer walks, to the beautiful and baleful
“Kolck,” or “Collect,” or “Fresh Water,” as it was sequentially called;
and I cannot imagine any young and susceptible hearts ever passing
without some access of sentiment through any green field so sweetly
named as the “Clover Waytie.”
There were some curious marriage customs,—some Dutch, some
English. One very pretty piece of folk-lore, of bride-honoring, was
brought to my notice through the records of a lawsuit in the infant
town of New Harlem in 1663, as well as an amusing local pendant to
the celebration of the custom. It seems that a certain young Harlem
couple were honored in the pleasant fashion of the Fatherland, by
having a “May-tree” set up in front of their dwelling-place. But certain
gay young sparks of the neighborhood, to anger the groom and cast
ridicule on his marriage, came with unseemly noise of blowing of
horns, and hung the lovely May-tree during the night with ragged
stockings. We never shall know precisely what special taunt or insult
was offered or signified by this over-ripe crop of worn-out hosiery;
but it evidently answered its tantalizing purpose, for on the morrow,
at break of day, the bridegroom properly resented the “mockery and
insult,” cut down the hateful tree, and committed other acts of great
wrath; which, being returned in kind (for thrice was the stocking-full
tree set up), developed a small riot, and thus the whole affair was
recorded. Among the State Papers at Albany are several letters
relating to another insulting “stocking-tree” set up in Albany at about
the same date, and also fiercely resented.
Collections for the church poor were sometimes taken at
weddings, as was the universal custom for centuries in Holland.
When Stephanus Van Cortlandt and Gertrude Schuyler were married
in Albany, in 1671, thirteen guilders six stuyvers were contributed at
the wedding, and fifteen guilders at the reception the following day.
At the wedding of Martin Kreiger, the same year, eleven guilders
were collected; at another wedding the same amount. When the
daughter of Domine Bogardus was married, it was deemed a very
favorable time and opportunity to take up a subscription for building
the first stone church in New Amsterdam. When the wedding-guests
were all mellow with wedding-cheer, “after the fourth or fifth round of
drinking,” says the chronicle, and, hence generous, each vied with
the other in good-humored and pious liberality, they subscribed
“richly.” A few days later, so the chronicle records, some wished to
reconsider the expensive and expansive transaction at the wedding-
feast, and “well repented it.” But Director Kieft stiffly held them to
their contracts, and “nothing availed to excuse.”
It is said that the English drink of posset was served at weddings.
From the “New York Gazette” of February 13, 1744, I copy this
receipt for its manufacture:—
“A Receipt for all young Ladies that are going to be Married.
To Make a
SACK-POSSET.
From famed Barbadoes on the Western Main

Fetch sugar half a pound; fetch sack from Spain
A pint; and from the Eastern Indian Coast
Nutmeg, the glory of our Northern toast.
O’er flaming coals together let them heat
Till the all-conquering sack dissolves the sweet.
O’er such another fire set eggs, twice ten,
New born from crowing cock and speckled hen;
Stir them with steady hand, and conscience pricking
To see the untimely fate of twenty chicken.
From shining shelf take down your brazen skillet,
A quart of milk from gentle cow will fill it.
When boiled and cooked, put milk and sack to egg,
Unite them firmly like the triple League.
Then covered close, together let them dwell
Till Miss twice sings: You must not kiss and tell.
Each lad and lass snatch up their murdering spoon,
And fall on fiercely like a starved dragoon.”
Many frankly simple customs prevailed. I do not know at how early

a date the fashion obtained of “coming out bride” on Sunday; that is,
the public appearance of bride and groom, and sometimes entire
bridal party in wedding-array, at church the Sunday after the
marriage. It certainly was a common custom long before
Revolutionary times, in New England as well as New York; but it
always seems to me more an English than a Dutch fashion. Mr.
Gabriel Furman, in his manuscript Commonplace Book, dated 1810,
now owned by the Long Island Historical Society, tells of one groom
whom he remembered who appeared on the first Sunday after his
marriage attired in white broadcloth; on the second, in brilliant blue
and gold; on the third, in peach-bloom with pearl buttons. The bride’s
dress, wholly shadowed by all this magnificence, is not even named.
Mrs. Vanderbilt tells of a Flatbush bride of the last century, who was
married in a fawn-colored silk over a light-blue damask petticoat. The
wedding-waistcoat of the groom was made of the same light-blue
damask,—a delicate and deferential compliment. Often it was the
custom for the bridal pair to enter the church after the service began,
thus giving an opportunity for the congregation to enjoy thoroughly
the wedding-finery. Whether bride and groom were permitted to sit
together within the church, I do not know. Of course ordinarily the
seats of husband and wife were separate. It would seem but a poor
show, with the bride in a corner with a lot of old ladies, and the
groom up in the gallery.
On Long Island the gayety at the home of the bride’s parents was
often followed on the succeeding day by “open house” at the house
of the groom’s parents, when the wedding-party, bridesmaids and all,
helped to keep up the life of the wedding-day. An old letter says of
weddings in the city of New York:—
“The Gentlemen’s Parents keep Open house just in the
same manner as the Bride’s Parents. The Gentlemen go from
the Bridegroom’s house to drink Punch with and give Joy to
his Father. The Bride’s visitors go in the same manner from
the Bride’s to her mother’s to pay their compliments to her.
There is so much driving about at these times that in our
narrow streets there is some danger. The Wedding-house
resembles a bee-hive. Company perpetually flying in and out.”
All this was in vogue by the middle of the last century. There was
no leaving home by bride and groom just when every one wanted
them,—no tiresome, tedious wedding-journey; all cheerfully enjoyed
the presence of the bride, and partook of the gayety the wedding
brought. In the country, up the Hudson and on Long Island, it was
lengthened out by a bride-visiting,—an entertaining of the bridal
party from day to day by various hospitable friends and relations for
many miles around; and this bride-visiting was usually made on
horseback.
Let us picture a bride-visiting in spring-time on Long Island, where,
as Hendrick Hudson said, “the land was pleasant with grass and
flowers and goodly trees as ever seen, and very sweet smells came
therefrom.” The fair bride, with her happy husband; the gayly
dressed bridesmaids, in silken petticoats, and high-heeled scarlet
shoes, with rolled and powdered hair dressed with feathers and
gauze, riding a-pillion behind the groom’s young friends, in satin
knee-breeches, and gay coats and cocked hats,—all the
accompanying young folk in the picturesque and gallant dress of the
times, and gay with laughter and happy voices,—a sight pretty to see
in the village streets, or, fairer still, in the country lanes, where the
woods were purely starred and gleaming with the radiant dogwood;
or roads where fence-lines were “white with blossoming cherry-trees
as if touched with lightest snow;” or where pink apple-blossoms
flushed the fields and dooryards; or, sweeter far, where the flickering
shadows fell through a bridal arch of the pale green feathery foliage
of the abundant flowering locust-trees, whose beautiful hanging
racemes of exquisite pink-flushed blossoms cast abroad a sensuous
perfume like orange blossoms, which fitted the warmth, the glowing
sunlight, the fair bride, the beginning of a new life;—let us picture in
our minds this June bride-visiting; we have not its like to-day in
quaintness, simplicity, and beauty.
CHAPTER IV
TOWN LIFE
The earlier towns in New Netherland gathered usually closely

around a fort, both for protection and companionship. In New
Amsterdam, as in Albany, this fort was an intended refuge against
possible Indian attacks, and also in New Amsterdam the established
quarters in the new world of the Dutch West India Company. As the
settlement increased, roads were laid out in the little settlement
leading from the fort to any other desired point on the lower part of
the island. Thus Heere Straat, the Breede Weg, or Broadway, led
from the fort of New Amsterdam to the common pasture-lands.
Hoogh Straat, now Stone Street, was evolved from part of the road
which led down to the much-used Ferry to Long Island, at what is
now Peck Slip. Whitehall Street was the shortest way to the East
River. In front of the fort was the Bowling Green. Other streets were
laid out, or rather grew, as needs increased. They were irregular in
width and wandering in direction. They were not paved nor kept in
good order, and at night were scarcely lighted.
In December, 1697, city lamps were ordered in New York “in the
dark time of the moon, for the ease of the inhabitants.” Every
seventh house was to cause a lanthorn and candle to be hung out
on a pole, the expense to be equally shared by the seven neighbors,
and a penalty of ninepence was decreed for every default. And
perhaps the watch called out in New York, as did the watch in Old
York, in London and other English cities, “Lanthorne, and a whole
candell-light! Hang out your lights here.” An old chap-book has a
watchman’s rhyme beginning,—
“A light here! maids, hang out your light,

And see your horns be clear and bright
That so your candle clear may shine,” etc.
Broad Street was in early days a canal or inlet of the sea, and was
called De Heere Graft, and extended from the East River to Wall
Street. Its waters, as far as Exchange Place, rose and fell with the
tide. It was crossed by several foot-bridges and a broader bridge at
Hoogh Straat, or Stone Street, which bridge became a general
meeting-place, a centre of trade. And when the burghers and
merchants decided to meet regularly at this bridge every Friday
morning, they thus and then and there established the first Exchange
in New York City. It is pleasant to note, in spite of the many miles of
city growth, how closely the exchange centres have remained near
their first home. In 1660 the walks on the banks of the Graft were
paved, and soon it was bordered by the dwellings of good citizens;
much favored on account of the homelikeness, so Mr. Janvier
suggests, of having a good, strong-smelling canal constantly under
one’s nose, and ever-present the pleasant familiar sight of squat
sailor-men and squat craft before one’s eyes. In 1676, when simple
and primitive ways of trade were vanishing and the watercourse was
no longer useful or needful, the Heere Graft was filled in—reluctantly,
we can believe—and became Broad Street.
The first mention of street-cleaning was in 1695, when Mr.
Vanderspiegle undertook the job for thirty pounds a year. By 1701
considerable pains was taken to clean the city, and to remove
obstructions in the public ways. Every Friday dirt was swept by each
citizen in a heap in front of his or her house, and afterwards carted
away by public cartmen, who had threepence a load if the citizen
shovelled the dirt into the cart, sixpence if the cartman loaded his
cart himself. Broad Street was cleaned by a public scavenger at a
salary of $40 per annum paid by the city; for the dirt from other
streets was constantly washed into it by rains, and it was felt that
Broad Street residents should not be held responsible for other
people’s dirt. Dumping-places were established. Regard was paid
from an early date to preserving “the Commons.” It was ordered that
lime should not be burnt thereon; that no hoopsticks or saplings
growing thereon should be cut; no timber taken to make into
charcoal; no turfs or sods carried away therefrom; no holes dug
therein; no rubbish be deposited thereon.
Within the city walls all was orderly and quiet. “All persons who
enter ye gates of ye citty with slees, carts and horses, horseback, not
to ride faster than foot-tap.” The carters were forced to dismount and
walk at their horses’ heads. All moved slowly in the town streets.
Living in a fortified town, they still were not annoyed by discharge of
guns, for the idle “fyring of pistells and gunns” was prohibited on
account of “ill-conveniants.”
The first houses were framed and clap-boarded; the roofs were
thatched with reeds; the chimneys were catted, made of logs of
wood filled and covered with clay; sometimes even of reeds and
mortar,—for there were, of course, at first no bricks. Hayricks stood
in the public streets. Hence fires were frequent in the town, breaking
out in the wooden catted chimneys; and the destruction of the
inflammable chimneys was decreed by the magistrates. In 1648 it
was ordered in New Amsterdam that no “wooden or platted chimney”
should be built south of the Fresh-water Pond. Fire-wardens—
brandt-meesters—were appointed, who searched constantly and
pryingly for “foul chimney-harts,” and fined careless housekeepers
therefor when they found them.
It is really surprising as well as amusing to see how the citizens
resented this effort for their safety, this espionage over their
hearthstones; and especially the wives resented the snooping in
their kitchens. They abused the poor schout who inspected the
chimney-hearths, calling him “a little cock, booted and spurred,” and
other demeaning names. In 1658 Maddaleen Dirck, as she passed
the door of the fire-warden, called out tantalizingly to him, “There is
the chimney-sweep at his door,—his chimney is always well-swept.”
She must have been well scared and truly repentant at the enormity
of her offence when she was brought up before the magistrates and
accused of having “insulted the worshipful fire-warden on the
highway, and incited a riot.”
In spite of vigilance and in spite of laws, foul chimneys were
constantly found. We hear of the town authorities “reciting that they
have long since condemned flag-roofs, and wooden and platted
chimneys, but their orders have been neglected, and several fires
have occurred; therefore they amplify their former orders as follows:
All flag-roofs, wooden chimneys, hay-barracks, and hay-stacks shall
be taken down within four months, in the penalty of twenty-five
guilders.”
The magistrates further equipped the town against conflagration
by demanding payment of a beaver skin from each house, to
purchase with the collected sum two hundred and fifty leather fire-
buckets from the Fatherland. But delays were frequent in ocean
transportation, and the shoemakers in town finally made the fire-
buckets. They were placed in ten groups in various houses
throughout the town. For their good order and renewal, each
chimney was thereafter taxed a guilder a year. By 1738, two engines
with small, solid wooden wheels or rollers were imported from
England, and cared for with much pride.
In Albany similar wooden chimneys at first were built; we find
contractors delivering reeds for roofs and chimneys. “Fire-leathes”
and buckets were ordered. Buckets were owned by individuals and
the town; were marked with initials for identification. Many stood a
century of use, and still exist as cherished relics. The manner of
bucket-service was this: As soon as an alarm of fire was given by
shouts or bell-ringing, all citizens of all classes at once ran to the
scene of the conflagration. All who owned buckets carried them, and
from open windows other fire-buckets were flung out on the streets
by persons who were delayed for a few moments by any cause. The
running crowd seized the buckets, and on reaching the fire a double
line was made from the fire to the river. The buckets filled with water
were passed up the line to the fire, the empty buckets down. Any
one who attempted to break the line was promptly soused with a
bucket of water. When all was over, the fire-warden took charge of
the buckets, and as soon as possible the owners appeared, and
each claimed and carried home his own buckets.
There was a police department in New Amsterdam as well as a
fire department. In 1658 the burgomasters and schepens appointed
a ratel-wacht, or rattle-watch, of ten watchmen, of whom Lodewyck
Pos was Captain. Their wages were high,—twenty-four stuyvers
(about fifty cents) each a night, and plenty of firewood. The Captain
collected fifty stuyvers a month from each house,—not as has since
been collected in like manner for the private bribing of the police, but
as a legalized method of paying expenses. The rules for the watch
are amusing, but cannot be given in full. They sometimes slept on
duty, as they do now, and paid a fine of ten stuyvers for each
offence. They could not swear, nor fight, nor be “unreasonable;” and
“when they receive their quarter-money, they shall not hold any
gathering for drink nor any club meeting.”
Attention is called to one rule then in force: “If a watchman receive
any sum of money as a fee, he shall give the same to the Captain;
and this fee so brought in shall be paid to the City Treasurer”—oh
the good old times!
The presence of a considerable force of troops was a feature of
life in some towns. The soldiers were well cared for when quartered
within the fort, sleeping on good, soft, goose-feather beds, with warm
homespun blankets and even with linen sheets, all hired from the
Dutch vrouws; and supplied during the winter with plentiful loads of
firewood, several hundred, through levy on the inhabitants; good
hard wood, too,—“no watte Pyn wood, willige, oly noote, nor
Lindewood” (which was intended for English, but needs translation
into “white pine, willow, butternut, nor linden”).
No doubt the soldiers came to be felt a great burden, for often they
were billeted in private houses. We find one citizen writing seriously
what reads amusingly like modern slang,—that “they made him
weary.” Another would furnish bedding, provisions, anything, if he
need not have any soldier-boarders assigned to him. One of the
twenty-three clauses of the “Articles of Surrender” of the Dutch was
that the “townsmen of Manhattans shall not have any soldiers
quartered upon them without being satisfied and paid for them by
their officers.” In Governor Nicholl’s written instructions to the
commander at Fort Albany, he urges him not to lend “too easey an
eare” to the soldiers’ complaints against their land-lords.
Since in the year 1658 the soldiers of New Amsterdam paid but
twenty cents a week for quarters when lodged with a citizen, it is not
surprising that their presence was not desired. A soldier’s pay was
four dollars a month.
They were lawless fellows, too lazy to chop wood for their fires;
they had to be punished for burning up for firewood the stockades
they were enlisted to protect. Their duties were slight,—a drill in the
morning, no sentry work during the day, a watch over the city gates
at night, and cutting wood. The military code of the day reveals a
very lax condition of discipline; it wasn’t really much of an army in
Dutch days. And as for the Fort and the Battery in the town of New
Amsterdam, read Mr. Janvier’s papers thereon to learn fully their
innocuous pretence of warlikeness.
There was very irregular foreign and in-land mail service. It is with
a retrospectively pitying shiver that we read a notice, as late as
1730, that “whoever inclines to perform the foot-post to Albany this
winter may make application to the Post-Master.” Later we find the
postmaster leisurely collecting the mail during several weeks for “the
first post to Albany this winter.” Of course this foot-post was only
made when the river was frozen over; swift sloops carried the
summer mail up the river in two or three weeks,—sometimes in only
ten days from New York to Albany. I can fancy the lonesome post
journeying alone up the solemn river, under the awe-full shadow of
old Cro’nest, sometimes climbing the icy Indian paths with ys-
sporen, oftener, I hope, skating swiftly along, as a good son of a
Hollander should, and longing every inch of the way for spring and
the “breaking-up” of the river.
In 1672, “Indian posts” carried the Albany winter mail; trustworthy
redmen, whose endurance and honesty were at the service of their
white friends.
The first regular mail started by mounted post from New York for
Boston on January 1, 1673. His “portmantles” were crammed with
letters and “small portable goods” and “divers bags.” He was “active,
stout, indefatigable, and honest.” He could not change horses till he
reached Hartford. He was ordered to keep an eye out for the best
ways through forests, and accommodations at fords, ferries, etc.,
and to watch for all fugitive soldiers and servants, and to be kind to
all persons journeying in his company. While he was gone eastward
a locked box stood in the office of the Colonial Secretary at New
York to collect the month’s mail. The mail the post brought in return,
being prepaid, was carried to the “coffee-house,” put on a table, well
thumbed over by all who cared to examine it, and gradually
distributed, two or three weeks’ delay not making much difference
any way.
As in all plantations in a new land, there was for a time in New
Netherland a lack of servants. Complaints were sent in 1649 to the
States-General of “the fewness of boors and farm-servants.”
Domestic servants were not found in many households; the capable
wife and daughters performed the housework and dairy work. As
soon as servants were desired they were speedily procured from
Africa. The Dutch brought the first negro slaves to America. In the
beginning these slaves in New Netherland were the property of the
Dutch West India Company, which rented their services. The
company owned slaves from the year 1625, when it first established
its authority, and promised to each patroon twelve black men and
women from ships taken as prizes. In 1644 it manumitted twelve of
the negroes who had worked faithfully nearly a score of years in
servitude. In 1652 the Government in Holland consented to the
exportation of slaves to the colony for sale. In 1664 Governor
Stuyvesant writes of an auction of negroes that they brought good
prices, and were a great relief to the garrison in supplying funds to
purchase food. Thus did the colony taste the ease of ill-gotten
wealth. Though the Duke of York and his governors attempted to
check the slave-trade, by the end of the century the negroes had
increased much in numbers in the colony. In the Kip family were
twelve negro house-servants. Rip van Dam had five; Colonel de
Peyster and the Widow Van Courtlandt had each seven adult
servants. Colonel Bayard, William Beeckman, David Provoost, and
Madam Van Schaick each had three.
On Long Island slaves abounded. It is the universal testimony that
they were kindly treated by the Dutch,—too kindly, our English lady
thought, who rented out her slaves. Masters were under some bonds
to the public. They could not, under Dutch rule, whip their slaves
without authorization from the government. The letters in the Lloyd
Collection in regard to the slave Obium are striking examples of
kindly consideration, and of constant care and thought for his
comfort and happiness.
The wages of a hired servant-girl in New York in 1655 were three
dollars and a half a month, which was very good pay when we
consider the purchasing power of money at that time. It is not till the
eighteenth century that we read of the beginning of our vast servant-
supply of Irish servants.
There was much binding out of children and young folk for terms
of service. In Stuyvesant’s time several invoices of Dutch children
from the almshouses were sent to America to be put to service, and
the official letters concerning them show much kindliness of thought
and intent towards these little waifs and strays. Early in the next
century a sad little band of Palatines was bound out in New York
families. It may prove of interest to give one of the bonds of
indenture of a house-servant in Albany.
“This Indenture witnesseth that Aulkey Hubertse,
Daughter of John Hubertse, of the Colony of Rensselaerwyck
deceased hath bound herself as a Meniall Servant, and by
these presents doth voluntary and of her own free will and
accord bind herself as a Meniall Servant unto John Delemont
of the City of Albany, weaver, by and with the consent of the
Deacons of the Reformed Dutch Church in the Citty of Albany,
who are as overseers in the disposal of the said Aulkey
Hubertse to serve from the date of these present Indentures
unto the full end and term of time that the said Aulkey
Hubertse shall come to Age, all which time fully to be
Compleat and ended, during all which term the said servant
her said Master faithfully shall serve, his secrets keep, his
lawful commands gladly everywhere obey, she shall do no
Damage to her said Master nor see it to be done by others
without letting or giving notice thereof to her said Master: she
shall not waste her Master’s goods or lend them unlawfully to

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(eBook PDF) Information Technology

Auditing 4th by James A. Hall

Auditing PC-Based Accounting Systems 103 CHAPTER 6

ERP System Configurations 537 Privacy 568

IT AUDITING, 4th edition explores state-of-the-art audit issues to provide students

NEW AND REVISED FEATURES

End of Chapter Material

Updated Chapters 1 through 5

Revised Chapter 8, “Data Structures and CAATTs for Data Extraction”

Revised ACL Tutorials

Revised Bradmark ACL Case

ORGANIZATION AND CONTENT

Chapter 2, “Auditing IT Governance Controls”

Chapter 3, “Security Part I: Auditing Operating Systems and Networks”

Chapter 4, “Security Part II: Auditing Database Systems”

Chapter 5, “Systems Development and Program Change Activities”

Chapter 6, “Transaction Processing and Financial Reporting Systems Overview”

Chapter 7, “Computer-Assisted Audit Tools and Techniques”

Chapter 8, “CAATTs for Data Extraction and Analysis”

Chapter 11, “Enterprise Reasource Planning Systems”

Chapter 12, “Business Ethics, Fraud, and Fraud Detection”

ABOUT THE AUTHOR

evelopments in information technology (IT) have had a tremendous impact on

External (Financial) Audits

Attest Service versus Advisory Services

The following requirements apply to attestation services:

• The levels of service in attestation engagements are limited to examination, review,

compliance with organizational policies, reviewing the organization’s compliance with

External versus Internal Auditors

THE ROLE OF THE AUDIT COMMITTEE

FINANCIAL AUDIT COMPONENTS

TABLE 1.1 Generally Accepted Auditing Standards

Management Assertions and Audit Objectives

TABLE 1.2 Audit Objectives and Audit Procedures Based

From famed Barbadoes on the Western Main

Many frankly simple customs prevailed. I do not know at how early

The earlier towns in New Netherland gathered usually closely

“A light here! maids, hang out your light,

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